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Rating Action:

Moody's downgrades 18 Turkish banks; outlooks remain negative

18 Jun 2019

London, 18 June 2019 -- Moody's Investors Service has today downgraded 18 banks in Turkey. The local currency long-term deposit ratings, and the local and foreign currency senior unsecured and issuer ratings -- where applicable - were downgraded by one notch and the outlooks remain negative. The standalone baseline credit assessments (BCAs) of 16 banks were downgraded by one notch, while the BCAs of the remaining two banks were downgraded by two notches. A full list of the affected ratings can be found at the end of this press release.

The downgrades primarily reflect (1) a significant increase in external vulnerability for the country, exposing Turkish banks to a higher risk of a sudden shift in investor sentiment and depositor behaviour; (2) a higher risk of more extreme government policy measures, which could include restricted access to foreign currency for depositors, reflecting policy uncertainty and weakening central bank's net foreign currency reserves; and (3) a more prolonged deterioration of the operating environment, leading to a further weakening of banks' solvency metrics. Moody's has captured these challenges by lowering the Macro Profile it assigns to Turkey to Very Weak+ from Weak- by increasing the negative adjustment it applies for Funding Conditions score.

This rating action follows Moody's downgrade, on 14 June, of the Government of Turkey's bond rating to B1 from Ba3 with negative outlook, which also resulted in the lowering of the ceiling for foreign currency deposits to B3 from B2. For further information on the sovereign rating action, please refer to Moody's press release published on 14 June 2019: Moody's downgrades Turkey's ratings to B1 and maintains negative outlook (https://www.moodys.com/research/--PR_402552).

The negative outlooks, which are in line with the negative outlook on the sovereign rating, reflect the risk of a further increase in the probability of capital controls and restrictions on access to foreign currency, as well as ongoing deterioration of the operating environment.

RATINGS RATIONALE

Moody's has lowered Turkey's Macro Profile to Very Weak+ from Weak-, driving the downgrade of Turkish banks' BCA, to reflect (1) a significant increase in external vulnerability; (2) weakening external buffers; and (3) deteriorating solvency metrics.

-- SIGNIFICANT INCREASE IN EXTERNAL VULNERABILITY

Turkish banks high reliance on short-term funding in foreign currency remains a structural weakness, rendering them vulnerable to shifts in investor sentiment and stress scenarios.

This weakness has been a key negative driver of Turkish banks' ratings for several years. With around 30% of tangible banking assets being funded by wholesale debt, Turkey is one of the emerging countries that is most reliant on market funding. As at April 2019, a sizeable USD64 billion of this wholesale exposure was in foreign currency and maturing in the next 12 months.

A key mitigating factor is that the banks hold large amounts (USD100 billion) of liquid assets in foreign currency. Moody's notes, however, that only USD21 billion are cash or unencumbered securities, while the rest comprises receivables from the central bank (USD33 billion), receivables from financial institutions (USD30 billion), or compulsory reserves with the central bank.

Furthermore, retail depositors have also continued to convert a material portion of their local currency deposits into foreign currency (mainly US dollars) to protect their savings from depreciation. Recently, the level of foreign currency deposits reached about USD209 billion, a sizeable 54% of total deposits.

-- HIGHER RISK OF MORE EXTREME POLICY MEASURES

Against the backdrop of this reliance on foreign currency funding, the government has announced a number of economic reform packages since May 2018. However, most government measures have continued to be focused on the near-term priority of propping up economic activity at the expense of eroding the underlying resilience of the economy and the banking system to external shocks, in part by increasing its fragility to shifts in market sentiment.

Moody's also notes that the central bank's net foreign currency reserves are limited at around USD27 billion, and they include an undisclosed amount of swaps with banks that lend foreign currency raised in the wholesale market and borrow lira to lend in the economy.

In the context of high policy uncertainty, the combination of structural weaknesses, potential market stress, and limited mitigating factors increase the risk of more extreme policy measures, which could include restricted access to foreign currency for depositors in a stressed scenario.

-- DETERIORATING SOLVENCY METRICS

Moody's also believes that the deterioration of the operating environment may be more prolonged than it previously expected, leading to higher asset risk and lower profitability for the banks.

The rating agency expects the Turkish real GDP to contract by 2% in 2019 and to grow only marginally in 2020 (+2%). This represents a material deterioration from previous years. In 2017, real GDP grew by 7.6% and in 2018, despite a sharp deterioration of the currency, real GDP expanded 2.6%. Inflation will remain very high at 18.5% in 2019 and 13% in 2020 (2018: 20.3%), while the Turkish lira will remain weak.

Moody's expects that the macroeconomic challenges will lead to an increase in the stock of problem loans of Turkish banks. A higher inflow of problem loans will lead to higher provisioning costs, reducing the profitability of Turkish banks that is, on average, strong. Some weaker banks will not have sufficient pre-provision profits to offset a spike in loan-loss charges.

Despite a reduction in profitability, Moody's believes that capital will remain stable for most Turkish banks. Nevertheless, due to the still high level of assets in foreign currency, the capital of Turkish banks is still susceptible to a material currency deterioration.

ALL STANDALONE BCAs DOWNGRADED

These challenges drove Moody's to lower Turkish banks' Macro Profile by one notch to Very Weak+ from Weak- by increasing the negative adjustment it applies for Funding Conditions score. The lower Macro Profile, in turn, led Moody's to downgrade the BCA of the 18 rated banks based in Turkey.

For 16 banks, the downgrade of their BCAs was limited to one notch. For two banks the BCAs were downgraded by two notches: T.C. Ziraat Bankasi A.S. (Ziraat) and Turkiye Vakiflar Bankasi T.A.O. (Vakifbank). The larger downgrade reflects the unseasoned risk that the banks have built via recent higher-than-average loan growth.

UPLIFT FROM AFFILIATE SUPPORT IS BROADLY UNCHANGED

Moody's expectations of affiliate support, and the related notches of uplift, remain unchanged for seven Turkish banks: Alternatifbank A.S. (Alternatifbank), Denizbank A.S. (Denizbank), HSBC Bank A.S. (Turkey) (HSBC-TR), ING Bank A.S. (Turkey) (ING-TR), QNB Finansbank A.S. (QNB Finansbank), Turk Ekonomi Bankasi A.S. (TEB), Yapi ve Kredi Bankasi A.S. (Yapi).

The adjusted BCAs of these banks, a measure that incorporates the uplift from affiliate support but not uplift from government support, were downgraded by the same amount of notches as their respective standalone BCAs.

The rating agency's assessment of affiliate support for Turkiye Garanti Bankasi A.S. (Garanti BBVA) was reduced to low from moderate, and the notches of uplift to zero from one. Moody's expects a lower likelihood of extraordinary support from parent Banco Bilbao Vizcaya Argentaria, S.A. (BBVA, BCA: baa2) and has lowered the probability of affiliate support to low from moderate.

The rating agency's assessment of affiliate support for Odea Bank A.S. (Odea) from its parent Bank Audi S.A.L. (Bank Audi, BCA: caa1) remains high. However, because Odea and Bank Audi have the same BCA of caa1, Odea's adjusted BCA does not receive any uplift from affiliate support. Similarly, for Turkiye Sinai Kalkinma Bankasi A.S. (TSKB), which has a caa1 BCA, the moderate probability of affiliate support coming from parent Turkiye Is Bankasi A.S. (Isbank), which also has a BCA of caa1, does not provide any uplift.

PROBABILITY OF GOVERNMENT SUPPORT IS BROADLY UNCHANGED

Moody's has kept its assumptions of government support unchanged for 17 banks and increased the support assumption for one.

The long-term deposit and issuer rating of eight banks -- where applicable - benefit from uplift from government support, reflecting Moody's assumptions of very high or high probability of government support: Ziraat, Isbank, Garanti BBVA, Akbank T.A.S. (Akbank), Turkiye Halk Bankasi A.S. (Halkbank), Vakifbank, Export Credit Bank of Turkey A.S. (Turk Exim), TSKB.

The long-term deposit and senior unsecured ratings of government-owned Ziraat and Vakifbank now benefit from a two- and three-notch uplift of government support respectively, from one and two previously. This reflects an unchanged very high probability of government support and a wider gap between the bank's BCA and Turkey's sovereign debt rating.

Moody's has increased its government support assumptions for Garanti BBVA to high from moderate, resulting in a one-notch uplift (from zero previously), reflecting the bank's large size in the Turkish banking system, as well as a lower probability of affiliate support from BBVA.

For the other banks, the rating agency continues to maintain a low probability of government support, which does not provide any rating uplift.

FOREIGN CURRENCY DEPOSIT RATINGS ARE IN SOME CASES CONSTRAINED BY THE FOREIGN CURRENCY DEPOSIT CEILING

Moody's lowered the long-term foreign currency deposit ceiling for Turkish banks to B3 from B2 on 14 June 2019. As a consequence, the long-term foreign currency deposit ratings of Akbank, Alternatifbank, Garanti BBVA, ING-TR, QNB Finansbank, TEB, Vakifbank, Yapi, and Ziraat are capped at B3.

The lowering of the ceiling reflects Moody's view that the probability of more extreme outcomes by the authorities has increased. This could include restricting access to foreign currency.

NATIONAL SCALE RATING

Moody's also took action on the National Scale Ratings (NSR) of eight Turkish banks, reflecting the downgrade of their ratings, and the resulting changes to Turkey's anchor point according to Moody's NSR mapping.

Moody's affirmed the long-term NSR deposit ratings of six banks: Alternatifbank, Garanti BBVA, HSBC-TR, ING-TR, Odea, and Yapi. At the same time, for two banks, Moody's downgraded the long-term NSR issuer and deposit ratings, respectively, by one notch: Nurol Investment Bank A.S. (Nurolbank) and Sekerbank T.A.S. (Sekerbank).

NEGATIVE OUTLOOK

All long-term deposit, senior and issuer ratings have a negative outlook, in line with the negative outlook on the sovereign rating. The outlook reflects the risk of a further increase in the probability of capital controls and restrictions on access to foreign currency.

FACTORS THAT COULD LEAD TO AN UPGRADE/DOWNGRADE

An upgrade is unlikely, given the current negative outlook. The outlook could be changed to stable following a stabilisation of Turkey's operating environment.

A downgrade could be driven by further deterioration in Turkey's operating environment, a higher-than-expected deterioration of asset quality, a material decline in capital ratios, or lower-than-expected profitability.

BANK-SPECIFIC CONSIDERATIONS

Akbank T.A.S. (Akbank)

Moody's downgraded the BCA of Akbank T.A.S. (Akbank) to b3 from b2, the long-term local currency deposit rating and the senior unsecured debt rating to B2 from B1, and the long-term foreign currency deposit rating to B3 from B2.

The action reflects the weaker operating environment in Turkey, and the rating agency's expectations that Akbank's problem loans will increase from their current moderate level and that its strong profitability will decline. Moody's expects the bank's moderate core capital to remain broadly stable, with pre-provision profits offsetting higher loan loss provisions and risk-weighted assets; at the same time, Moody's believes that Akbank's core capital is susceptible to an unexpected severe depreciation of the Turkish lira.

Moody's said that the BCA of Akbank remains among the highest in Turkey, reflecting the bank's high core capital and provisioning coverage against problem loans.

Moody's assessment of high probability of government support continues to lead to a one-notch uplift to Akbank's long-term local currency deposit ratings and senior unsecured debt ratings.

Alternatifbank A.S. (Alternatifbank)

Moody's downgraded the BCA of Alternatifbank A.S. (Alternatifbank) to caa1 from b3, the adjusted BCA to b1 from ba3, the long-term foreign currency deposit rating to B3 from B2 and long-term local currency deposit rating to B1 from Ba3.

The action reflects the weaker operating environment in Turkey, and the rating agency's expectations that Alternatifbank's problem loans will increase and profitability will reduce from their current moderate levels. Moody's expects capital to increase from its current weak level following the recent capital injection from the parent. The ratings also capture very high market funding which is only partly mitigated by the bank's stock of liquid assets.

Moody's unchanged assessment of a very high probability of support from Alternatifbank's main shareholder, Qatar's The Commercial Bank (P.S.Q.C.) (CBQ, BCA: ba1), continues to provide three notches of uplift to Alternatifbank's adjusted BCA.

Denizbank A.S. (Denizbank)

Moody's downgraded the BCA of Denizbank A.S. (Denizbank) to caa1 from b3, the adjusted BCA to b3 from b2 and the long-term foreign and local currency deposit ratings to B3 from B2.

The action reflects the weaker operating environment in Turkey, and the rating agency's expectations that Denizbank's problem loans will increase from their current high level, while its strong profitability will decline. Moody's expects capital to remain broadly stable, with pre-provision profits offsetting higher loan loss provisions and risk-weighted assets; at the same time, Moody's believes that Denizbank's capital is susceptible to an unexpected severe depreciation of the Turkish lira.

Moody's unchanged assessment of high probability of support from Denizbank's current shareholder Sberbank (BCA: ba1), as well as the future shareholder Emirates NBD PJSC (BCA: ba1) continues to provide one notch of uplift to Denizbank's adjusted BCA.

Export Credit Bank of Turkey A.S. (Turk Exim)

Moody's downgraded the BCA of Export Credit Bank of Turkey A.S. (Turk Exim) to b3 from b2, and the long-term foreign and local currency issuer ratings to B2 from B1.

The action reflects the weaker operating environment in Turkey, and the rating agency's expectations that Turk Exim's problem loans will increase from their current very low level , due to the weakening of the underlying credit profiles of the borrowers as well as the commercial banks and government which guarantee the loans. Moody's expects that Turk Exim's moderate profitability will decline, while the bank's capital will remain broadly stable, with pre-provision profits offsetting higher loan loss provisions and risk-weighted assets. At the same time, Moody's believes that Turk Exim's capital is susceptible to an unexpected severe depreciation of the Turkish lira. The ratings also capture very high market funding, although largely from the Central Bank, guaranteed by the Treasury or from international development institutions, and also partly mitigated by the bank's stock of liquid assets.

Moody's assessment of a very high probability of government support continues to lead to a one-notch uplift to Turk Exim's long-term issuer ratings.

HSBC Bank A.S. (Turkey) (HSBC-TR)

Moody's downgraded the BCA of HSBC Bank A.S. (Turkey) (HSBC-TR) to caa2 from caa1, the adjusted BCA to b3 from b2 and the long-term foreign and local currency deposit ratings to B3 from B2.

The action reflects the weaker operating environment in Turkey, and the rating agency's expectations that HSBC-TR's problem loans will increase from their current high level and that capital and profitability, will decline. At the same time, Moody's believes that HSBC-TR's capital is susceptible to an unexpected severe depreciation of the Turkish lira. The ratings also capture moderate market funding which is only partly mitigated by the bank's stock of liquid assets.

Moody's unchanged assessment of a high probability of support coming from HSBC-TR's ultimate parent HSBC Holdings plc (BCA: a2) continues to provide two notches of uplift to HSBC-TR's adjusted BCA.

ING Bank A.S. (Turkey) (ING-TR)

Moody's downgraded the BCA of ING Bank A.S. (Turkey) (ING-TR) to caa1 from b3, the adjusted BCA to b1 from ba3, the long-term foreign currency deposit rating to B3 from B2 and long-term local currency deposit rating to B1 from Ba3.

The action reflects the weaker operating environment in Turkey, and the rating agency's expectations that ING-TR's problem loans will increase from their current moderate level and that its strong profitability will decline. Moody's expects capital to remain broadly stable, with pre-provision profits offsetting higher loan loss provisions and risk-weighted assets; at the same time, Moody's believes that ING-TR's capital is susceptible to an unexpected severe depreciation of the Turkish lira. The ratings also capture very high market funding which is mitigated by the significant part that is sourced from its parent and by the bank's stock of liquid assets.

Moody's unchanged assessment of a very high probability of support coming from ING-TR's main shareholder ING Bank N.V. (ING Bank, BCA: baa1) continues to provide three notches of uplift to ING-TR's adjusted BCA.

Nurol Investment Bank A.S. (Nurolbank)

Moody's downgraded the BCA of Nurol Investment Bank A.S. (Nurolbank) to caa2 from caa1 and the long-term local and foreign currency issuer ratings to Caa2 from Caa1.

The action reflects the weaker operating environment in Turkey, and the rating agency's expectations that Nurolbank'sproblem loans will increase from their current high level and that its strong profitability will decline. Moody's expects capital to remain broadly stable, with pre-provision profits offsetting higher loan loss provisions and risk-weighted assets; at the same time, Moody's believes that Nurolbank's capital is susceptible to an unexpected severe depreciation of the Turkish lira. The ratings also capture very high market funding which is only partly mitigated by the bank's stock of liquid assets.

Odea Bank A.S. (Odea)

Moody's downgraded the BCA of Odea Bank A.S. (Odea) to caa1 from b3, and the long-term local and foreign currency deposit ratings to Caa1 from B3.

The action reflects the weaker operating environment in Turkey, the expectation that Odea's problem loans will increase from their current high level, core capital and profitability will reduce from their current moderate and weak levels respectively, and that core capital remains sensitive to an unexpected severe depreciation of the Turkish lira. The ratings also capture moderate market funding, which is only partly mitigated by the bank's stock of liquid assets.

The rating agency continues to assume a high probability of affiliate support coming from parent Bank Audi S.A.L. (Bank Audi, BCA: caa1). However, because Odea and Bank Audi have the same BCA of caa1, Odea's adjusted BCA does not receive any uplift from affiliate support.

QNB Finansbank A.S. (QNB Finansbank)

Moody's downgraded the BCA of QNB Finansbank A.S. (QNB Finansbank) to b3 from b2, the adjusted BCA to b1 from ba3, the long-term foreign currency deposit rating to B3 from B2 and long-term local currency deposit rating to B1 from Ba3.

The action reflects the weaker operating environment in Turkey, and the rating agency's expectations that QNB Finansbank's problem loans will increase from their current high level and core capital and profitability will decline from current moderate and strong levels respectively. The ratings also capture very high market funding, which is only partly mitigated by the bank's stock of liquid assets.

Moody's unchanged assessment of a very high probability of support coming from QNB Finansbank's main shareholder Qatar National Bank (Q.P.S.C) (QNB, BCA: baa1), continues to provide two notches of uplift to QNB Finansbank's adjusted BCA.

Sekerbank T.A.S. (Sekerbank)

Moody's downgraded the BCA of Sekerbank T.A.S. (Sekerbank) to caa2 from caa1, and the long-term local and foreign currency deposit ratings to Caa2 from Caa1.

The action reflects, the weaker operating environment in Turkey, the expectation that Sekerbank's problem loans will increase from their current high level, core capital and profitability will decline from their current weak level, and that core capital remains sensitive to an unexpected severe depreciation of the Turkish lira. These issues are partially offset by a steep reduction in Sekerbank's reliance on market funds following a material increase in more inherently stable deposits.

T.C. Ziraat Bankasi A.S. (Ziraat)

Moody's downgraded the BCA of T.C. Ziraat Bankasi A.S. (Ziraat) to caa1 from b2, the long-term local currency deposit and senior unsecured debt ratings to B2 from B1, and the long-term foreign currency deposit rating to B3 from B2.

The action reflects the weaker operating environment in Turkey, and the rating agency's expectations that Ziraat's problem loans will increase from their current low level and that its strong profitability will decline. Moody's believes that Ziraat's above average loan growth in recessionary times will result in additional losses in the event of stress. Moody's expects the bank's moderate core capital to remain broadly stable, with pre-provision profits offsetting higher loan loss provisions and risk-weighted assets. At the same time, Moody's believes that Ziraat's core capital is susceptible to an unexpected severe depreciation of the Turkish lira. The ratings also capture high market funding which is only partly mitigated by the bank's stock of liquid assets.

Moody's unchanged assessment of a very high probability of government support leads to a two-notch uplift to Ziraat's long-term local currency deposit ratings and senior unsecured debt ratings, from one previously, reflecting the two-notch downgrade of Ziraat's BCA and the one-notch downgrade of Turkey's sovereign debt rating to B1 from Ba3.

Turk Ekonomi Bankasi A.S. (TEB)

Moody's downgraded the BCA of Turk Ekonomi Bankasi A.S. (TEB) to b3 from b2, the adjusted BCA to b1 from ba3, the long-term foreign currency deposit rating to B3 from B2 and long-term local currency deposit rating to B1 from Ba3.

The action reflects the weaker operating environment in Turkey, and the rating agency's expectations that TEB's problem loans will increase from their current moderate level and that its strong profitability will decline further. Moody's expects capital to remain broadly stable, with pre-provision profits offsetting higher loan loss provisions and risk-weighted assets; at the same time, Moody's believes that TEB's capital is susceptible to an unexpected severe depreciation of the Turkish lira. The ratings also capture moderate market funding, which is only partly mitigated by the bank's stock of liquid assets.

Moody's unchanged assessment of a high probability of support coming from TEB's ultimate parent BNP Paribas (BNPP, BCA: baa1), continues to provide two notches of uplift to TEB's adjusted BCA.

Turkiye Garanti Bankasi A.S. (Garanti BBVA)

Moody's downgraded the BCA of Turkiye Garanti Bankasi A.S. (Garanti BBVA) to b3 from b2, the adjusted BCA to b3 from b1, the long-term local currency deposit rating and the senior unsecured debt rating to B2 from B1, and the long-term foreign currency deposit rating to B3 from B2.

The action reflects the weaker operating environment in Turkey, the rating agency's expectations that Garanti BBVA's problem loans will increase from their current high level and that its strong profitability will decline, and its strong solvency and liquidity metrics in the context of the Turkish banking system. Moody's expects the bank's moderate core capital to remain broadly stable, with pre-provision profits offsetting higher loan loss provisions and risk-weighted assets. At the same time, Moody's believes that Garanti BBVA's core capital is susceptible to an unexpected severe depreciation of the Turkish lira. The ratings also capture high market funding which is only partly mitigated by the bank's stock of liquid assets.

Moody's said that the BCA of Garanti BBVA remains among the highest in Turkey, reflecting the bank's good risk management and strong profitability.

Moody's lowered the probability of support coming from Garanti BBVA's main shareholder Banco Bilbao Vizcaya Argentaria, S.A. (BBVA, BCA: baa2) to low from moderate, resulting in a decrease in uplift to the adjusted BCA to zero notches from one. The change reflects a lower likelihood that BBVA will support Garanti BBVA in the event of severe stress in Turkey. At the same time, Moody's increased the probability of government support to high from moderate, and the uplift to Garanti BBVA's long-term local currency deposit ratings and senior unsecured debt ratings to one notch from zero, reflecting the size of Garanti BBVA in the Turkish banking system.

Turkiye Halk Bankasi A.S. (Halkbank)

Moody's downgraded the BCA of Turkiye Halk Bankasi A.S. (Halkbank) to caa2 from caa1, and the long-term local and foreign currency deposit ratings and the senior unsecured debt rating to B3 from B2.

The action reflects the weaker operating environment in Turkey, the expectation that Halkbank's problem loans will increase from their current moderate level, core capital and profitability will decline from their current weak level, and that core capital remains sensitive to an unexpected severe depreciation of the Turkish lira. The ratings also capture high market funding which is only partly mitigated by the bank's stock of liquid assets. Historic governance issues at senior management level continue to negatively weigh on Halkbank's ratings.

Moody's assessment of a very high probability of government support continues to lead to a two-notch uplift to Halkbank's long-term deposits and senior unsecured ratings.

Turkiye Is Bankasi A.S. (Isbank)

Moody's downgraded the BCA of Turkiye Is Bankasi A.S. (Isbank) to caa1 from b3, and the long-term local and foreign currency deposit ratings and the senior unsecured debt rating to B3 from B2.

The action reflects the weaker operating environment in Turkey, and the rating agency's expectations that Isbank's problem loans will increase from their current moderate level and that its strong profitability will decline. Moody's expects the bank's moderate core capital to remain broadly stable, with pre-provision profits offsetting higher loan loss provisions and risk-weighted assets; at the same time, Moody's believes that Isbank's core capital is susceptible to an unexpected severe depreciation of the Turkish lira. The ratings also capture high market funding which is only partly mitigated by the bank's stock of liquid assets.

Moody's assessment of a high probability of government support continues to lead to a one-notch uplift to Isbank's long-term deposits and senior unsecured ratings.

Turkiye Sinai Kalkinma Bankasi A.S. (TSKB)

Moody's downgraded the BCA of Turkiye Sinai Kalkinma Bankasi A.S. (TSKB) to caa1 from b3, and the long-term local and foreign currency issuer ratings to B3 from B2.

The action reflects the weaker operating environment in Turkey, and the rating agency's expectations that TSKB's problem loans will increase from their current low level and that its strong profitability will decline. Moody's expects the bank's weak core capital to remain broadly stable, with pre-provision profits offsetting higher loan loss provisions and risk-weighted assets; at the same time, Moody's believes that TSKB's core capital is susceptible to an unexpected severe depreciation of the Turkish lira. TSKB's ratings continue to incorporate the risk deriving from high borrower and sector concentration, which reflect the bank's role as a development bank. The ratings also capture very high levels of market funding which is only partly mitigated by the bank's stock of liquid assets.

Moody's unchanged assessment of a moderate probability of support coming from Isbank does not provide any uplift (unchanged) to TSKB's adjusted BCA, because Isbank and TSKB continue to have the same BCA, while unchanged high probability of government support continues to drive a one-notch uplift to TSKB's long-term issuer ratings.

Turkiye Vakiflar Bankasi T.A.O. (Vakifbank)

Moody's downgraded the BCA of Turkiye Vakiflar Bankasi T.A.O. (Vakifbank) to caa2 from b3, the long-term local currency deposit rating and the senior unsecured debt rating to B2 from B1, and the long-term foreign currency deposit rating to B3 from B2.

The action reflects the weaker operating environment in Turkey, and the rating agency's expectations that Vakifbank's problem loans will increase from their current high level and that its strong profitability will decline. Moody's believes that Vakifbank's above average loan growth in recessionary times will result in additional losses in case of stress. Moody's expects capital to remain broadly stable, with pre-provision profits offsetting higher loan loss provisions and risk-weighted assets. At the same time, Moody's believes that Vakifbank's capital is susceptible to an unexpected severe depreciation of the Turkish lira. The ratings also capture very high market funding which is only partly mitigated by the bank's stock of liquid assets.

Moody's unchanged assessment of a very high probability of government support leads to a three-notch uplift to Vakifbank's long-term local currency deposit ratings and senior unsecured debt ratings, from two previously, reflecting the two-notch downgrade of Vakifbank's BCA and the one-notch downgrade of Turkey's sovereign debt rating to B1 from Ba3.

Yapi ve Kredi Bankasi A.S. (Yapi)

Moody's downgraded the BCA of Yapi ve Kredi Bankasi A.S. (Yapi) to b3 from b2, the adjusted BCA to b2 from b1, the long-term local currency deposit rating and the senior unsecured debt rating to B2 from B1, and the long-term foreign currency deposit rating to B3 from B2.

The action reflects the weaker operating environment in Turkey, and the rating agency's expectations that Yapi's problem loans will increase from their current high levels and that its strong profitability will decline. Moody's expects the bank's moderate core capital to remain broadly stable, with pre-provision profits offsetting higher loan loss provisions and risk-weighted assets; at the same time, Moody's believes that Yapi's core capital is susceptible to an unexpected severe depreciation of the Turkish lira. The ratings also capture high market funding which is only partly mitigated by the bank's stock of liquid assets.

Moody's unchanged assessment of a very high probability of support coming from Yapi's main shareholder UniCredit S.p.A. (UniCredit, BCA: ba1), continues to provide one notch of uplift to Yapi's adjusted BCA.

LIST OF AFFECTED RATINGS

Issuer: Akbank T.A.S.

..Downgrades:

....Long-term Counterparty Risk Ratings (Local and Foreign Currency), downgraded to B1 from Ba3

....Long-term Bank Deposits (Foreign Currency), downgraded to B3 from B2, outlook remains Negative

....Long-term Bank Deposits (Local Currency), downgraded to B2 from B1, outlook remains Negative

....Long-term Counterparty Risk Assessment, downgraded to B1(cr) from Ba3(cr)

....Baseline Credit Assessment, downgraded to b3 from b2

....Adjusted Baseline Credit Assessment, downgraded to b3 from b2

....Senior Unsecured Regular Bond/Debenture (Foreign Currency), downgraded to B2 from B1, outlook remains Negative

....Subordinate Regular Bond/Debenture (Foreign Currency), downgraded to Caa2(hyb) from Caa1(hyb)

..Affirmations:

....Short-term Counterparty Risk Ratings (Local and Foreign Currency), affirmed NP

....Short-term Bank Deposits (Local and Foreign Currency), affirmed NP

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

..Outlook Action:

....Outlook remains Negative

Issuer: Alternatifbank A.S.

..Downgrades:

....Long-term Counterparty Risk Ratings (Local and Foreign Currency), downgraded to Ba3 from Ba2

....Long-term Bank Deposits (Foreign Currency), downgraded to B3 from B2, outlook remains Negative

....Long-term Bank Deposits (Local Currency), downgraded to B1 from Ba3, outlook remains Negative

....Long-term Counterparty Risk Assessment, downgraded to Ba3(cr) from Ba2(cr)

....Baseline Credit Assessment, downgraded to caa1 from b3

....Adjusted Baseline Credit Assessment, downgraded to b1 from ba3

....Subordinate Regular Bond/Debenture (Foreign Currency), downgraded to B3(hyb) from B2(hyb)

..Affirmations:

....NSR Long-term Counterparty Risk Rating (Local Currency), affirmed Aaa.tr

....Short-term Counterparty Risk Ratings (Local and Foreign Currency), affirmed NP

....NSR Short-term Counterparty Risk Rating (Local Currency), affirmed TR-1

....NSR Long-term Bank Deposits (Local Currency), affirmed Aa1.tr

....Short-term Bank Deposits (Local and Foreign Currency), affirmed NP

....NSR Short-term Bank Deposits (Local Currency), affirmed TR-1

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

..Outlook Action:

....Outlook remains Negative

Issuer: Denizbank A.S.

..Downgrades:

....Long-term Counterparty Risk Ratings (Local and Foreign Currency), downgraded to B2 from B1

....Long-term Bank Deposits (Local and Foreign Currency), downgraded to B3 from B2, outlook remains Negative

....Long-term Counterparty Risk Assessment, downgraded to B2(cr) from B1(cr)

....Baseline Credit Assessment, downgraded to caa1 from b3

....Adjusted Baseline Credit Assessment, downgraded to b3 from b2

..Affirmations:

....Short-term Counterparty Risk Ratings (Local and Foreign Currency), affirmed NP

....Short-term Bank Deposits (Local and Foreign Currency), affirmed NP

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

..Outlook Action:

....Outlook remains Negative

Issuer: Export Credit Bank of Turkey A.S.

..Downgrades:

....Long-term Counterparty Risk Ratings (Local and Foreign Currency), downgraded to B1 from Ba3

....Long-term Counterparty Risk Assessment, downgraded to B1(cr) from Ba3(cr)

....Long-term Issuer Ratings (Local and Foreign Currency), downgraded to B2 from B1, outlook remains Negative

....Baseline Credit Assessment, downgraded to b3 from b2

....Adjusted Baseline Credit Assessment, downgraded to b3 from b2

....Senior Unsecured Regular Bond/Debenture (Foreign Currency), downgraded to B2 from B1, outlook remains Negative

....Senior Unsecured Medium-Term Note Program (Foreign Currency), downgraded to (P)B2 from (P)B1

..Affirmations:

....Short-term Counterparty Risk Ratings (Local and Foreign Currency), affirmed NP

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

....Short-term Issuer Ratings (Local and Foreign Currency), affirmed NP

....Other Short Term, affirmed (P)NP

..Outlook Action:

....Outlook remains Negative

Issuer: HSBC Bank A.S. (Turkey)

..Downgrades:

....Long-term Counterparty Risk Ratings (Local and Foreign Currency), downgraded to B2 from B1

....Long-term Bank Deposits (Local and Foreign Currency), downgraded to B3 from B2, outlook remains Negative

....Long-term Counterparty Risk Assessment, downgraded to B2(cr) from B1(cr)

....Baseline Credit Assessment, downgraded to caa2 from caa1

....Adjusted Baseline Credit Assessment, downgraded to b3 from b2

..Affirmations:

....NSR Long-term Counterparty Risk Rating (Local Currency), affirmed A2.tr

....Short-term Counterparty Risk Ratings (Local and Foreign Currency), affirmed NP

....NSR Short-term Counterparty Risk Rating (Local Currency), affirmed TR-1

....NSR Long-term Bank Deposits (Local Currency), affirmed Baa2.tr

....Short-term Bank Deposits (Local and Foreign Currency), affirmed NP

....NSR Short-term Bank Deposits (Local Currency), affirmed TR-3

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

..Outlook Action:

....Outlook remains Negative

Issuer: ING Bank A.S. (Turkey)

..Downgrades:

....Long-term Counterparty Risk Ratings (Local and Foreign Currency), downgraded to Ba3 from Ba2

....Long-term Bank Deposits (Foreign Currency), downgraded to B3 from B2, outlook remains Negative

....Long-term Bank Deposits (Local Currency), downgraded to B1 from Ba3, outlook remains Negative

....Long-term Counterparty Risk Assessment, downgraded to Ba3(cr) from Ba2(cr)

....Baseline Credit Assessment, downgraded to caa1 from b3

....Adjusted Baseline Credit Assessment, downgraded to b1 from ba3

..Affirmations:

....NSR Long-term Counterparty Risk Rating (Local Currency), affirmed Aaa.tr

....Short-term Counterparty Risk Ratings (Local and Foreign Currency), affirmed NP

....NSR Short-term Counterparty Risk Rating (Local Currency), affirmed TR-1

....NSR Long-term Bank Deposits (Local Currency), affirmed Aa1.tr

....Short-term Bank Deposits (Local and Foreign Currency), affirmed NP

....NSR Short-term Bank Deposits (Local Currency), affirmed TR-1

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

..Outlook Action:

....Outlook remains Negative

Issuer: Nurol Investment Bank A.S.

..Downgrades:

....Long-term Counterparty Risk Ratings (Local and Foreign Currency), downgraded to Caa1 from B3

....Long-term Counterparty Risk Assessment, downgraded to Caa1(cr) from B3(cr)

....Long-term Issuer Ratings (Local and Foreign Currency), downgraded to Caa2 from Caa1, outlook remains Negative

....NSR Long-term Issuer Rating (Local Currency), downgraded to B1.tr from Ba3.tr

....Baseline Credit Assessment, downgraded to caa2 from caa1

....Adjusted Baseline Credit Assessment, downgraded to caa2 from caa1

..Affirmations:

....NSR Long-term Counterparty Risk Rating (Local Currency), affirmed Baa3.tr

....Short-term Counterparty Risk Ratings (Local and Foreign Currency), affirmed NP

....NSR Short-term Counterparty Risk Rating (Local Currency), affirmed TR-3

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

....Short-term Issuer Ratings (Local and Foreign Currency), affirmed NP

....NSR Short-term Issuer Rating (Local Currency), affirmed TR-4

..Outlook Action:

....Outlook remains Negative

Issuer: Odea Bank A.S.

..Downgrades:

....Long-term Counterparty Risk Ratings (Local and Foreign Currency), downgraded to B3 from B2

....Long-term Bank Deposits (Local and Foreign Currency), downgraded to Caa1 from B3, outlook remains Negative

....Long-term Counterparty Risk Assessment, downgraded to B3(cr) from B2(cr)

....Baseline Credit Assessment, downgraded to caa1 from b3

....Adjusted Baseline Credit Assessment, downgraded to caa1 from b3

....Subordinate Regular Bond/Debenture (Foreign Currency), downgraded to Caa3(hyb) from Caa2(hyb)

..Affirmations:

....NSR Long-term Counterparty Risk Rating (Local Currency), affirmed Baa1.tr

....Short-term Counterparty Risk Ratings (Local and Foreign Currency), affirmed NP

....NSR Short-term Counterparty Risk Rating (Local Currency), affirmed TR-2

....NSR Long-term Bank Deposits (Local Currency), affirmed Ba1.tr

....Short-term Bank Deposits (Local and Foreign Currency), affirmed NP

....NSR Short-term Bank Deposits (Local Currency), affirmed TR-4

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

..Outlook Action:

....Outlook remains Negative

Issuer: QNB Finansbank A.S.

..Downgrades:

....Long-term Counterparty Risk Ratings (Local and Foreign Currency), downgraded to Ba3 from Ba2

....Long-term Bank Deposits (Foreign Currency), downgraded to B3 from B2, outlook remains Negative

....Long-term Bank Deposits (Local Currency), downgraded to B1 from Ba3, outlook remains Negative

....Long-term Counterparty Risk Assessment, downgraded to Ba3(cr) from Ba2(cr)

....Baseline Credit Assessment, downgraded to b3 from b2

....Adjusted Baseline Credit Assessment, downgraded to b1 from ba3

....Senior Unsecured Regular Bond/Debenture (Foreign Currency), downgraded to B1 from Ba3, outlook remains Negative

....Senior Unsecured Medium-Term Note Program (Local and Foreign Currency), downgraded to (P)B1 from (P)Ba3

..Affirmations:

....Short-term Counterparty Risk Ratings (Local and Foreign Currency), affirmed NP

....Short-term Bank Deposits Rating (Local and Foreign Currency), affirmed NP

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

....Other Short Term (Local and Foreign Currency), affirmed (P)NP

..Outlook Action:

....Outlook remains Negative

Issuer: Sekerbank T.A.S.

..Downgrades:

....Long-term Counterparty Risk Ratings (Local and Foreign Currency), downgraded to Caa1 from B3

....Long-term Bank Deposits (Local and Foreign Currency), downgraded to Caa2 from Caa1, outlook remains Negative

....NSR Long-term Bank Deposits (Local Currency), downgraded to B1.tr from Ba3.tr

....Long-term Counterparty Risk Assessment, downgraded to Caa1(cr) from B3(cr)

....Baseline Credit Assessment, downgraded to caa2 from caa1

....Adjusted Baseline Credit Assessment, downgraded to caa2 from caa1

..Affirmations:

....NSR Long-term Counterparty Risk Rating (Local Currency) , Affirmed Baa3.tr

....Short-term Counterparty Risk Ratings (Local and Foreign Currency), affirmed NP

....NSR Short-term Counterparty Risk Rating (Local Currency), affirmed TR-3

....Short-term Bank Deposits (Local and Foreign Currency), affirmed NP

....NSR Short-term Bank Deposits (Local Currency), affirmed TR-4

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

..Outlook Action:

....Outlook remains Negative

Issuer: T.C. Ziraat Bankasi A.S.

..Downgrades:

....Long-term Counterparty Risk Ratings (Local and Foreign Currency), downgraded to B1 from Ba3

....Long-term Bank Deposits (Foreign Currency), downgraded to B3 from B2, outlook remains Negative

....Long-term Bank Deposits (Local Currency), downgraded to B2 from B1, outlook remains Negative

....Long-term Counterparty Risk Assessment, downgraded to B1(cr) from Ba3(cr)

....Baseline Credit Assessment, downgraded to caa1 from b2

....Adjusted Baseline Credit Assessment, downgraded to caa1 from b2

....Senior Unsecured Regular Bond/Debenture (Foreign Currency), downgraded to B2 from B1, outlook remains Negative

....Senior Unsecured Medium-Term Note Program (Local and Foreign Currency), downgraded to (P)B2 from (P)B1

..Affirmations:

....Short-term Counterparty Risk Ratings (Local and Foreign Currency), affirmed NP

....Short-term Bank Deposits (Local and Foreign Currency), affirmed NP

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

....Other Short Term (Local and Foreign Currency), affirmed (P)NP

..Outlook Action:

....Outlook remains Negative

Issuer: Turk Ekonomi Bankasi A.S.

..Downgrades:

....Long-term Counterparty Risk Ratings (Local and Foreign Currency), downgraded to Ba3 from Ba2

....Long-term Bank Deposits (Foreign Currency), downgraded to B3 from B2, outlook remains Negative

....Long-term Bank Deposits (Local Currency), downgraded to B1 from Ba3, outlook remains Negative

....Long-term Counterparty Risk Assessment, downgraded to Ba3(cr) from Ba2(cr)

....Baseline Credit Assessment, downgraded to b3 from b2

....Adjusted Baseline Credit Assessment, downgraded to b1 from ba3

..Affirmations:

....Short-term Counterparty Risk Ratings (Local and Foreign Currency), affirmed NP

....Short-term Bank Deposits (Local and Foreign Currency), affirmed NP

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

..Outlook Action:

....Outlook remains Negative

Issuer: Turkiye Garanti Bankasi A.S.

..Downgrades:

....Long-term Counterparty Risk Ratings (Local and Foreign Currency), downgraded to B1 from Ba3

....Long-term Bank Deposits (Foreign Currency), downgraded to B3 from B2, outlook remains Negative

....Long-term Bank Deposits (Local Currency), downgraded to B2 from B1, outlook remains Negative

....Long-term Counterparty Risk Assessment, downgraded to B1(cr) from Ba3(cr)

....Baseline Credit Assessment, downgraded to b3 from b2

....Adjusted Baseline Credit Assessment, downgraded to b3 from b1

....Senior Unsecured Regular Bond/Debenture (Local and Foreign Currency), downgraded to B2 from B1, outlook remains Negative

....Senior Unsecured Medium-Term Note Program (Foreign Currency), downgraded to (P)B2 from (P)B1

....Subordinate Regular Bond/Debenture (Foreign Currency), downgraded to Caa2(hyb) from B3(hyb)

..Affirmations:

....NSR Long-term Counterparty Risk Rating (Local Currency), affirmed Aa1.tr

....Short-term Counterparty Risk Ratings (Local and Foreign Currency), affirmed NP

....NSR Short-term Counterparty Risk Rating (Local Currency), affirmed TR-1

....NSR Long-term Bank Deposits (Local Currency), affirmed A1.tr

....Short-term Bank Deposits (Local and Foreign Currency), affirmed NP

....NSR Short-term Bank Deposits (Local Currency), affirmed TR-1

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

....Other Short Term (Foreign Currency), affirmed (P)NP

..Outlook Action:

....Outlook remains Negative

Issuer: Turkiye Halk Bankasi A.S.

..Downgrades:

....Long-term Counterparty Risk Rating (Local and Foreign Currency), downgraded to B2 from B1

....Long-term Bank Deposits (Local and Foreign Currency), downgraded to B3 from B2, outlook remains Negative

....Long-term Counterparty Risk Assessment, downgraded to B2(cr) from B1(cr)

....Baseline Credit Assessment, downgraded to caa2 from caa1

....Adjusted Baseline Credit Assessment, downgraded to caa2 from caa1

....Senior Unsecured Regular Bond/Debenture (Foreign Currency), downgraded to B3 from B2, outlook remains Negative

....Subordinate Regular Bond/Debenture (Foreign Currency), downgraded to (P)Ca(hyb) from (P)Caa3(hyb)

..Affirmations:

....Short-term Counterparty Risk Ratings (Local and Foreign Currency), affirmed NP

....Short-term Bank Deposits (Local and Foreign Currency), affirmed NP

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

..Outlook Action:

....Outlook remains Negative

Issuer: Turkiye Is Bankasi A.S.

..Downgrades:

....Long-term Counterparty Risk Ratings (Local and Foreign Currency), downgraded to B2 from B1

....Long-term Bank Deposits (Local and Foreign Currency), downgraded to B3 from B2, outlook remains Negative

....Long-term Counterparty Risk Assessment, downgraded to B2(cr) from B1(cr)

....Baseline Credit Assessment, downgraded to caa1 from b3

....Adjusted Baseline Credit Assessment, downgraded to caa1 from b3

....Senior Unsecured Regular Bond/Debenture (Foreign Currency), downgraded to B3 from B2, outlook remains Negative

....Senior Unsecured Medium-Term Note Program (Local and Foreign Currency), downgraded to (P)B3 from (P)B2

....Subordinate Regular Bond/Debenture (Foreign Currency), downgraded to Caa2 from Caa1

....Subordinate Regular Bond/Debenture (Foreign Currency), downgraded to Caa3(hyb) from Caa2(hyb)

..Affirmations:

....Short-term Counterparty Risk Ratings (Local and Foreign Currency), affirmed NP

....Short-term Bank Deposits (Local and Foreign Currency), affirmed NP

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

....Other Short Term (Local and Foreign Currency), affirmed (P)NP

..Outlook Action:

....Outlook remains Negative

Issuer: Turkiye Sinai Kalkinma Bankasi A.S.

..Downgrades:

....Long-term Counterparty Risk Ratings (Local and Foreign Currency), downgraded to B2 from B1

....Long-term Counterparty Risk Assessment, downgraded to B2(cr) from B1(cr)

....Long-term Issuer Rating (Local and Foreign Currency), downgraded to B3 from B2, outlook remains Negative

....Baseline Credit Assessment, downgraded to caa1 from b3

....Adjusted Baseline Credit Assessment, downgraded to caa1 from b3

....Senior Unsecured Regular Bond/Debenture (Foreign Currency), downgraded to B3 from B2, outlook remains Negative

....Senior Unsecured Medium-Term Note Program (Local and Foreign Currency), downgraded to (P)B3 from (P)B2

....Subordinate Regular Bond/Debenture (Foreign Currency), downgraded to Caa3(hyb) from Caa2(hyb)

..Affirmations:

....Short-term Counterparty Risk Rating (Local and Foreign Currency), affirmed NP

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

....Short-term Issuer Rating (Local and Foreign Currency), affirmed NP

....Other Short Term (Local and Foreign Currency), affirmed (P)NP

..Outlook Action:

....Outlook remains Negative

Issuer: Turkiye Vakiflar Bankasi T.A.O.

..Downgrades:

....Long-term Counterparty Risk Ratings (Local and Foreign Currency), downgraded to B1 from Ba3

....Long-term Bank Deposits (Foreign Currency), downgraded to B3 from B2, outlook remains Negative

....Long-term Bank Deposits (Local Currency), downgraded to B2 from B1, outlook remains Negative

....Long-term Counterparty Risk Assessment, downgraded to B1(cr) from Ba3(cr)

....Baseline Credit Assessment, downgraded to caa2 from b3

....Adjusted Baseline Credit Assessment, downgraded to caa2 from b3

....Senior Unsecured Regular Bond/Debenture (Foreign Currency), downgraded to B2 from B1, outlook remains Negative

....Senior Unsecured Medium-Term Note Program (Local and Foreign Currency), downgraded to (P)B2 from (P)B1

....Subordinate Regular Bond/Debenture (Foreign Currency), downgraded to Caa3 from Caa1

....Subordinate Regular Bond/Debenture (Foreign Currency), downgraded to Ca(hyb) from Caa2(hyb)

..Affirmations:

....Short-term Counterparty Risk Ratings (Local and Foreign Currency), affirmed NP

....Short-term Bank Deposits (Local and Foreign Currency), affirmed NP

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

....Other Short Term (Local and Foreign Currency), affirmed (P)NP

..Outlook Action:

....Outlook remains Negative

Issuer: Yapi ve Kredi Bankasi A.S.

..Downgrades:

....Long-term Counterparty Risk Ratings (Local and Foreign Currency), downgraded to B1 from Ba3

....Long-term Bank Deposits (Foreign Currency), downgraded to B3 from B2, outlook remains Negative

....Long-term Bank Deposits (Local Currency), downgraded to B2 from B1, outlook remains Negative

....Long-term Counterparty Risk Assessment, downgraded to B1(cr) from Ba3(cr)

....Baseline Credit Assessment, downgraded to b3 from b2

....Adjusted Baseline Credit Assessment, downgraded to b2 from b1

....Senior Unsecured Regular Bond/Debenture (Foreign Currency), downgraded to B2 from B1, outlook remains Negative

....Senior Unsecured Medium-Term Note Program (Local and Foreign Currency), downgraded to (P)B2 from (P)B1

....Subordinate Regular Bond/Debenture (Foreign Currency), downgraded to B3 from B2

....Subordinate Regular Bond/Debenture (Foreign Currency), downgraded to Caa1(hyb) from B3(hyb)

....Preferred Stock Non-cumulative (Foreign Currency), downgraded to Caa2(hyb) from Caa1(hyb)

..Affirmations:

....NSR Long-term Counterparty Risk Rating (Local Currency), affirmed Aa2.tr

....Short-term Counterparty Risk Ratings (Local and Foreign Currency), affirmed NP

....NSR Short-term Counterparty Risk Rating (Local Currency), affirmed TR-1

....NSR Long-term Bank Deposits (Local Currency), affirmed A2.tr

....Short-term Bank Deposits Rating (Local and Foreign Currency), affirmed NP

....NSR Short-term Bank Deposits (Local Currency), affirmed TR-1

....Short-term Counterparty Risk Assessment, affirmed NP(cr)

....Other Short Term (Local and Foreign Currency), affirmed (P)NP

..Outlook Action:

....Outlook remains Negative

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks published in August 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

Moody's National Scale Credit Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale credit ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".za" for South Africa. For further information on Moody's approach to national scale credit ratings, please refer to Moody's Credit rating Methodology published in May 2016 entitled "Mapping National Scale Ratings from Global Scale Ratings". While NSRs have no inherent absolute meaning in terms of default risk or expected loss, a historical probability of default consistent with a given NSR can be inferred from the GSR to which it maps back at that particular point in time. For information on the historical default rates associated with different global scale rating categories over different investment horizons, please see http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1174796.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

The below contact information is provided for information purposes only. Please see the ratings tab of the issuer page at www.moodys.com, for each of the ratings covered, Moody's disclosures on the lead rating analyst and the Moody's legal entity that has issued the ratings.

The relevant office for each credit rating is identified in "Debt/deal box" on the Ratings tab in the Debt/Deal List section of each issuer/entity page of the website.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Sean Marion
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Releasing Office:
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JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

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To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

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